I guess I do not really see how this would make a nice reliable and useable power curve that would really showcase the benefits of a turbo. With one large turbo you introduce a major dillemma if you want to maintain the 8400 rpm redline-you either will have absolutely no improvement or boost in the low range which I think would defeat the purpose of this, or if you do tune the
turbo for good low end torque, it will run out of steam by 7k (just like a 335) then will either be anemic or useless above 7k and will defeat the purpose of doing this on an m3.
The only benefit of using the s65 platform to turbo would be if you devise a way to use the entire rpm range from 3k-8400k which would require atleast 2 turbos IMO. Otherwise there are better engines to slap a turbo on IMO and will end up being nothing more than a turbo v8 with no special character.
In this case a supercharger might as well be used.
So aside from perhaps more efficiency, a large single turbo application does not suit this engine if you want to maitain its character